The Jakarta Post
The government has decided to postpone its plan to construct 15,200 megawatt (MW) electricity projects due to the rupiah weakening against the US dollar and the government’s policy to reduce imports.
On Tuesday, Energy and Mineral Resources Minister Ignasius Jonan said electricity was one of the strategic government projects that would be rescheduled, while the government was now encouraging contractors to increase local content.
He added that the import limitation would also apply to the mining, oil and gas and renewable energy sectors. “The objective is to control imports. We will focus on using domestic products,” said Jonan.
The local content of electricity projects ranged between 20 and 40 percent and therefore the majority of the electricity components should be imported, he said, adding that to reduce the import burden, the government decided to slow down the 35,000 MW electricity program.
He explained that the projects that had not reached financial closure, and whose investment value reached between US$24 billion and $25 billion, would be postponed.
Jonan said the postponement would save between $8 billion and $10 billion in imports. “Initially, the projects were targeted to be completed in 2019. With this policy, the projects will be postponed to between 2021 and 2026,” he added, saying that the projects were not canceled.
He claimed the electrification program was not affected by the postponement as currently it stood at 97.3 percent and by the end of this year, it would reach 97.5 percent and 99 percent in 2019. (bbn)